I ended up change the script line to the following.
objShell.Run("%COMSPEC% /k cacls ""c:\test\Growing Palms"" /E /G WhiteCastle\Sarah:F")

Any Idea as to what I was doing wrong is attempting to use the Variable.
I know that once your sent the %comspec% comand you are very much in at a dos prompt.
Perhaps if there was a way to pass over the variable to the shell command envirnment.